Fill in the Blank QuestionFill in the blank question.If a company has $2,000,000 in average assets, and desires to earn a return on investment of 30%, the company will need to earn income of $.
Question
Fill in the Blank QuestionFill in the blank question.If a company has .
Solution
To calculate the income a company needs to earn based on its desired return on investment, you can use the following formula:
Income = Average Assets * Desired Return on Investment
In this case, the company's average assets are $2,000,000 and the desired return on investment is 30% (or 0.30 in decimal form).
So, the calculation would be:
Income = $2,000,000 * 0.30
Therefore, the company will need to earn an income of $600,000 to achieve a 30% return on its average assets.
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